Treasurer Scott Morrison has blocked sale of Ausgrid to Chinese consortium

BREAKING: Treasurer Scott Morrison has blocked the sale of Ausgrid to a consortium from China citing concerns about national security.

Scott Morrison has blocked the sale of Ausgrid to the Chinese.

FEDERAL Treasurer Scott Morrison has made the preliminary decision to block the sale of Ausgrid to a Chinese consortium.

Citing issues of national security, Mr Morrison told reporters on Thursday afternoon he was limited to what he could say.

“When we assess these applications - and I stress we do this on every case, case by case, we pursue the national security issues to the nth degree, and that’s what we’ve done. That process has not enabled us to identify suitable mitigations to protect against the national security issues in this case. And that, at the end of the day, is paramount.”

The government was considering leasing a 50.4 per cent stake into Ausgrid, NSW’s state-owned enterprise, on a 99-year contract. As well as servicing the public, it supplies NSW government departments and the stock exchange.

Treasurer Scott Morrison said national security was considered when the decision about blocking Ausgrid sale was made.

Mr Morrison said foreign investment was welcome in Australia, and promised the government would “actively engage” with the rest of the world, “ because foreign investment capital is important to Australian jobs”.

Chinese state-owned State Grid Corp. and Hong Kong-registered Cheung Kong Infrastructure Group to buy a 99-year lease for half of the New South Wales state-owned electricity network Ausgrid for more than 10 billion Australian dollars ($7.6 billion).

Ausgrid supplies its service to more than 1.6 million homes and businesses in NSW.

The bidders will have until August 18 to make submissions on Mr Morrison’s preliminary decision.

“I am, of course, open to consider what the bidders put to me but at this stage no suitable mitigations have been identified that would, for the proposed transaction structure, appropriately address the identified risks,” he said.

NSW Treasurer Gladys Berejiklian said the decision wouldn’t derail NSW’s infrastructure plans.

“We can assure the people of NSW that regardless of how the process plays out, there will be no delays to our infrastructure pipeline and that we remain well on track to deliver on our promise to transform this State.”

The state government would continue in their efforts to sell Ausgrid, Ms Berejiklian said, noting there had been strong interest from investors.